Loan Agreement INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT

Transcription

1 Public Disclosure Authorized LOAN NUMBER 50 IT Public Disclosure Authorized Loan Agreement BETWEEN INTERNATIONAL BANK FOR RECONSTRUCTION Public Disclosure Authorized AND DEVELOPMENT AND CASSA PER OPERE STRAORDINARIE DI PUBBLICO INTERESSE NELL'ITALIA MERIDIONALE (CASSA PiR IL MEZZOGIORNO) Public Disclosure Authorized DATED OCTOBER 10, 1951

2 loan 2greement AGREEMENT, dated October 10, 1951, between INTER- NATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT (hereinafter called the Bank) and CASSA PER OPERE STRAOR- DINARIE DI PUBBLICo INTERESSE NELL'ITALIA MERIDIONALE (CASSA PER IL MEZZoGIORNO) (hereinafter called the Borrower). WHEREAS the Government of Italy has adopted a tenyear Plan for the development of Southern Italy to be executed by the Borrower; and WHEREAS the development of Sonthern Italy to be achieved by the Plan will create a demand for additional dollar imports; and WHEREAS the Bank has indicated its willingness to participate in financing the dollar impact of the ten-year Plan for the development of Southern Italy, the extent of such participation to be determined from time to time by agreement between the Bank, the Borrower and the Government of Italy in the light of all relevant considerations including progress made in carrying out the Plan and the Italian economic situation; and WHEREAS it has been determined that the initial Bank financing shall be in the amount of ten million dollars ($10,000,000). Now THEREFORE, the parties hereto hereby agree as follows: ARTICLE I Special Definitions SECTION Except where the context otherwise requires, the following terms have the following meanings wherever used in this Agreement or any Schedule thereto:

3 4 (1) The term "Cassa" means Cassa per opere straordinarie di pubblico interesse nell'italia meridionale (Cassa per il Mezzogiorno). (2) The term "Borrower" includes any department or agency of the Guarantor which may be charged by the Guarantor, upon dissolution of the Cassa or otherwise, with the carrying out of the obligations of the Borrower hereunder. (3) The term "Plan" means the ten-year plan for the economic and social advancement of Southern Italy, provided for in Law No. 646 of the Republic of Italy dated the 10th of August 1950, and as further described in Schedule 2 to this Agreement. (4) The term "Supplementary Projects" means the projects for the development of Southern Italy which shall be agreed upon by the Bank and the Borrower pursuant to Section 4.06 of this Agreement. (5) The term "Projects Account" means the account of the Borrower established pursuant to Section 4.05 of this Agreement. (6) The term "Agency" means any political subdivision of the Guarantor or any instrumentality of the Guarantor or of a political subdivision of the Guarantor and shall include any institution or organization a majority interest in which at the time referred to is owned directly or indirectly by the Guarantor or a political subdivision of the Guarantor, or all or substantially all of whose obligations are guaranteed by the Guarantor or a political subdivision of the Guarantor, or the operations of which are conducted primarily in the interest of or for account of the Guarantor or a political subdivision of the Guarantor, as the case may be. (7) The term "Loan Regulations" means Loan Regulations No. 4 of the Bank, dated December 6, 1950, subject however, to the modifications thereof set forth in Schedule 3 to this Agreement.

4 5 ARTICLE II The Loan SECTION The Bank agrees to lend to the Borrower, on the terms and conditions in this Agreement set forth or referred to, the sum of ten million dollars ($10,000,000). SECTION The parties to this Agreement accept all the provisions of the Loan Regulations, a copy of which has been furnished to the Borrower, with the same force and effect as if they were fully set forth herein. SECTION The Borrower shall pay to the Bank a commitment charge as provided in Section 2.02 of the Loan Regulations at the rate of three-fourths of one per cent (34 of 1%) per annum on the principal amount of the Loan not withdrawn from time to time. SECTION The Borrower shall pay interest at the rate of four and one-half per cent (41/%o) per annum on the principal amount of the Loan withdrawn and outstanding from time to time. SECTION Interest and commitment charge shall be payable in dollars semi-annually on May 1 and November 1 in each year. SECTION The Borrower shall repay the principal of the Loan in dollars in accordance with the amortization schedule set forth in Schedule 1 to this Agreement. ARTICLE III Purpose of Loan SECTION The purpose of the Loan is to assist the Borrower and the Republic of Italy in promoting the economic and social development of Southern Italy by supplying part of the foreign exchange requirements resulting

5 6 directly and indirectly from the carrying out of the initial stages of the Plan and by making available for the Supplementary Projects the lira equivalent of the Loan. ARTICLE IV Withdrawal of Proceeds of Loan and Use of Lira Equivalent SEcTION The Bank shall open a Loan Account on its books in the name of the Borrower and shall credil to such Account the amount of the Loan. The amount of the Loan may be withdrawn from the Loan Account as hereinafter and in the Loan Regulations provided, and subject to the rights of cancellation anu suspension set forth herein and in the Loan Regulations. SECTION The Borrower shall be entitled to make withdrawals in dollars from the Loan Account from time to time of such amounts as shall, together with amounts previously so withdrawn, bear the same ratio to $10,000,000 as amounts provided by the Borrower and expended on the carrying out of the Plan (other than the Supplementary Projects) since July 1, 1950, shall bear to 100 billion lire. SECTION When the Borrower shall desire to withdraw any amount from the Loan Account, the Borrower shall deliver to the Bank a written application in such form, and containing such statements and agreements, as the Bank shall reasonably request. The Borrower shall furnish to the Bank such documents and other evidence in support of the application as the Bank shall reasonably request, whether before or after the Bank shall have permitted any withdrawal requested in the application. Each application and the accompanying documents must be sufficient in form and substance to satisfy the Bank that the Borrower is entitled to withdraw from the Loan Account the amount applied for.

6 7 SECTION Since the rate at which Loan proceeds are withdrawn affects the cost to the Bank of holding funds at the Borrower's disposal, applications for withdrawal, with the necessary documentation, as in this Article provided, shall, except as the Bank and the Borrower shall otherwise agree, be made promptly in relation to expenditures for the Plan. SECTION Each withdrawal hereinabove provided for shall be paid by the Bank to or on the order of the Banca d'italia which shall thereupon transfer an amount in lire, equivalent to the amount so withdrawn, upon the order of the Borrower, to the Projects Account. The Projects Account shall be an account in the name of the Borrower in an Italian commercial bank of national character which shall have been selected by the Borrower and which shall have agreed to such arrangements with respect to withdrawals from the Projects Account as shall be satisfactory to the Bank. The Borrower shall in each application for a withdrawal state the conversion rate between the dollar and the lira on the basis of which such transfer shall be made in respect of such withdrawal and the makiug of such withdrawal shall be subject to the approval of such rate by the Bank. (a) The amounts so transferred to the credit of the Borrower in the Projects Account shall be used by it for assisting in the financing of Supplementary Projects in Southern Italy which will contribute to the development of that region. Such financing and the arrangements in respect thereof and of withdrawals from the Projects Account shall be in accordance with such criteria and procedures as shall be agreed upon between the Bank and the Borrower. Amounts in the Projects Account shall be used or withdrawn by the Borrower only for the financing of Supplementary Projects in accordance with such SECTION 4.06.

7 80 arrangements, except as the Bank and the Borrower may otherwise agree. (b) The arrangements, referred to in sub-paragraph (a) of this Section 4.06, fo-. the financing of a Supplementary Project shall in any event include the reservation by the Borrower of rights adequate to protect the interests of the Borrower and the Bank, including, without limitation, the right to require that the proceeds of such financing shall be used exclusively in the carrying out of such Supplementary Project, the right to require that the Supplementary Project be carried out and completed with due diligence and efficiency and in accordance with sound engineering and financial standards, the right to inspect such Supplementary Project, and the right to obtain all such information as the Borrower shall reasonably request relating to any of the foregoing and to the operation and financial condition of such Supplementary Project and, to the extent relevant thereto, of the enterprise which shall construct and operate it. Such right shall include appropriate provision whereby further access by such enterprise to the proceeds of such financing may be suspended or terminated by the Borrower upon failure by such enterprise to carry out the terms upon which such financing shall have been granted. SECTION ARTICLE V Bonds The Borrower shall execute and deliver Bonds representing the principal amount of the Loan as provided in the Loan Regulations. The Director General of the Borrower, and such person or persons as he shall appoint in writing to act in his stead, are designated as authorized representatives of the Borrower for the purposes of Section 6.12 (a) of the Loan Regulations. SECTION 5.02.

8 SECTION ARTICLE VI Particular Covenants (a) The Borrower shall cause the Plan to be carried out with due diligence and efficiency and in accordance with sound engineering practices. (b) The Borrower shall maintain, or cause to be maintained, books, accounts and records adequate to show the progress of the Plan and the Supplementary Projects and the operation and financial condition of the Supplementary Projects; shall at the request of the Bank enable, or take such steps as shall be necessary to enable, the Bank's accredited representatives to examine the sites, works and construction included in the Plan and the Supplementary Projects, the operation thereof, and any relevant records and documents; and shall furnish to the Bank all such information as the Bank shall reasonably request concerning the Plan and the Supplementary Projects, and the operation thereof. (c) The operations and transactions of the Borrower in connection with the Supplementary Projects shall be administered and accounted for by the Borrower separately from its other activities. (d) The Borrower shall exercise its rights in relation to each Supplementary Project in such manner as to ensure the carrying out and completion of such Project, by the enterprise which shall have contracted to construct it, with due diligence and efficiency and in accordance with sound engineering and financial practices. SECTION (a) The Borrower and the Bank shall co-. operate fully to assure that the purposes of the Loan and this Agreement shall be accomplished. To that end, each of them shall furnish to the other all such information as it shall reasonably request with regard to the general status of the Loan. On the part of the Borrower such informa-

9 10 tion shall include information with respect to its operations and financial condition. (b) The Borrower and the Bank shall from time to time exchange views with regard to matters relating to the purposes of the Loan and the maintenance of the service thereof. The Borrower shall promptly inform the Bank of any condition which shall arise that shall interfere with, or threaten to interfere with, the accomplishment of the purposes of the Loan or the maintenance of the service thereof. SEOTION It is the mutual intention of the Borrower and the Bank that no other debt shall enjoy any priority over the Loan by way of a lien on assets of the Borrower. To that end, the Borrower specifically undertakes that, except as the Bank shall otherwise agree, if any lien shall be created on any assets of the Berrower as security for any debt, such lien shall ipso facto equally and ratably secure the payment of the principal of, and interest and other charges on, the Loan and the Bonds, and that in the creation of any such lien express provision shall be made to that effect. However, this Section shall not apply to any lien created on any property at the time of purchase thereof solely as security for the payment of the purchase price of such property. The Borrower shall pay or cause to be paid any and all taxes, duties, charges or fees that shall be imposed on or in connection with the execution, issue, delivery or registration of this Agreement, the Bonds or the Guarantee Agreement, or that shall be imposed by the Guarantor or by any Agency or by any taxing authority thereof or therein upon this Agreement, the Bonds or the Guarantee Agreement, or the registration thereof with any Agency or official, or the payment of principal, interest or other charges thereunder. Such principal, interest and other charges shall be paid without deduction for and free SECTION 6.04.

10 11 of any and all such taxes, charges and fees. This Section shall not apply to taxation of any Bond, or payments made under the provisions of any Bond, when the beneficial holder thereof, other than the Bank, shall be an individual or corporate resident of the Guarantor. ARTICLE VII Remedies of the Bank SECTION If any event specified in paragraphs (a) or (b) of Section 5.02 of the Loan Regulations shall occur and shall have continued for a period of thirty days or if an event specified in paragraph (c) of Section 5.02 of the Loan Regulations shall occur and shall have continued for a period of sixty days after notice thereof shall have been given by the Bank to the Borrower, then at any subsequent time during the continuance thereof, the Bank, at its option, may declare the principal of the Loan and of all the Bonds then outstanding to be due and payable immediately, and upon any such declaration such principal shall become due and payable immediately, anything in this Agreement or in the Bonds to the contrary notwithstanding. ARTICLE VIII Miscellaneous SECTION The date specified for the purposes of Section 9.04 of the Loan Regulations is March 31, SECTION The Closing Date shall be December 31, SECTION The following addresses are specified for the purposes of Section 8.01 of the Loan Regulations: For the Bank: International Bank for Reconstruction and Development, 1818 H Street, N. W. Washington 25, D. C. United States of America.

11 For the Borrower: 12 Cassa per il Mezzogiorno, Via Aniene 14, Rome, Italy. IN WITNESS WHEREOF the parties hereto, acting through their representatives thereunto duly authorized, have caused this Agreement to be signed in their respective names and delivered in the District of Columbia, United States of America, as of the day and year first above written. INTERNATIONAL BANK FOR RECON- STRUCTION AND DEVELOPMENT by EUGENE R. BLACK President CASSA PER OPERE STRAORDINARIE DI PUBBLICO INTERESSE NELL' ITALIA MERIDIONALE (CASSA PER r MEZZOGIORNO) by ALFREDO SCAGLIONI Director General

12 13 SCHEDULE1 Amortization Schedule Principal Amount Date Payment of Outstanding After Payment Due Principal Each Payment May 1, $10,000,000 Nov. 1, 1956 $151,000 9,849,000 May 1, ,000 9,695,000 Nov. 1, ,000 9,537,000 May 1, ,000 9,376,000 Nov. 1, ,000 9,211,000 May 1, ,000 9,042,000 Nov. 1, ,000 8,869,000 May 1, ,000 8,693,000 Nov. 1, ,000 8,513,000 May 1, ,000 8,328,000 Nov. 1, ,000 8,139,000 May 1, ,000 7,946,000 Nov. 1, ,000 7,749,000 May 1, ,000 7,547,000 Nov. 1, ,000 7,341,000 May 1, ,000 7,130,000 Nov. 1, ,000 6,914,000 May 1, ,000 6,694,000 Nov. 1, ,000 6,469,000 May 1, ,000 6,239,000 Nov. 1, ,000 6,003,000 May 1, ,000 5, Nov. 1, ,000 5,516,000 May 1, ,000 5,264,000 Nov. 1, ,000 5,006,000 May 1, ,000 4,743,000 Nov. 1, ,000 4,474,000 May 1, ,000 4,199,000 Nov. 1, ,000 3,917,000 May 1, ,000 3,629,000 Nov. 1, ,000 3,335,000 May 1, ,000 3,034,000 Nov. 1, ,000 2,726,000 May 1, ,000 2,411,000 Nov. 1, ,000 2,089,000 May 1, ,000 1,760,000 Nov. 1, ,000 1,424,000 May 1, ,000 1,080,000 Nov. 1, , ,000 May 1, , ,000 Nov. 1, ,000 -

13 14 Premiums on Prepayment and Redemption The following percentages are specified as the premiums payable in dollars on repayment in advance of maturity of any part of the principal amount of the Loan pursuant to Section 2.05 (b) of the Loan Regulations or on the redemption of any Bond prior to its maturity pursuant to Section 6.16 of the Loan Regulations: Time of Prepayment or Redemption Premium Not more than 5 years before maturity... 1% More than 5 years but not more than 10 years before maturity... 1% More than 10 years but not more than 15 years before maturity... 11/% More than 15 years but not more than 20 years before maturity... 2 More than 20 years before maturity... 2

14 15 SCHEDULE 2 Description of Plan The ten-year plan for the development of Southern Italy is to be carried out by the Borrower over the period July 1, 1950-June 30, Its cost is estimated at about 1,000 billion Italian lire, to be allocated to the Borrower in annual instalments of 100 billion lire. The main categories of the Plan and the estimated amounts to be spent on each are as follows: In billion lire Land Reclamation, Irrigation and Improvement 440 Flood and Erosion Control 50 Land Transformation and Settlement 280 Aqueducts and Sewers 110 Roads 90 Promotion of Tourism 30 0 V 1,000

15 16 SCHEDULE 3 Modifications of the Loan Regulations For the purposes of this Agreement the provisions of the Loan Regulations shall be deemed to be modified as follows: (a) Section 2.02 of the Loan Regulations shall be deemed to read as follows: "' SECTION Commitment Charge. A commitment charge at the rate specified in the Loan Agreement shall be payable on the amount of the Loan standing to the credit of the Borrower from time to time in the Loan Account. Such commitment charge shall accrue from the Effective Date or from December 31, 1951, whichever shall be the earlier, to the respective dates on which amounts shall be withdrawn by the Borrower from the Loan Account as provided in Article IV of the Loan Agreement or shall be cancelled pursuant to Article V of these Regulations." (b) Sections 3.01, 3.02, 3.03, 3.04 and 3.05 of tl' Loan Regulations shall be deemed to be deleted. (c) Article IV of the Loan Regulations shall be deemed to be deleted. (d) Section 5.04 of the Loan Regulations shall be deemed to be deleted. (e) Section 6.05 of the Loan Regulations shall be deemed to read as follows: "The Bonds shall be payable as to principal and interest in dollars." (f) The reference to Article IV in Section 8.02 of the Loan Regulations shall be deemed to be a reference to Article IV of this Agreement. (g) Paragraphs 12 and 13 of Section of the Loan Regulations shall be deemed to be deleted.